Page last updated at 20:24 GMT, Tuesday, 10 February 2009

US Senate approves stimulus plan

The moment when President Obama learns the Senate has passed the stimulus plan

The US Senate has passed an economic stimulus plan expected to cost some $838bn (573bn).

The Democratic-controlled Senate voted 61-37 to approve the measure, with few Republicans opting to back it.

Tough negotiations are now expected in order to reconcile the Senate bill with the House of Representatives's version.

President Barack Obama welcomed the vote as a good start. It came as the US Treasury Secretary unveiled a bank bail-out plan worth some $1.5 trillion.

'No assurance'

The president, who says the stimulus measure is needed to create up to four million jobs and lift the economy, has said he wants the final package to reach his desk by 16 February.

Speaking at a public event in Fort Myers, Florida, Mr Obama said the passage of the Senate legislation was "good news" but warned there was still work to do.

The financial system is working against recovery, and that's the dangerous dynamic we need to change
Treasury Secretary Timothy Geithner

"We've still got to get the House bill and the Senate bill to match up before it gets sent to my desk, so we have a little more work to do over the next couple of days," he said.

Democratic Senate Majority Leader Harry Reid said he would send a completed version of the legislation to Mr Obama "as soon as possible".

But Mitch McConnell, the Republican Senate Minority Leader, complained that the bill was "full of waste", adding: "We have no assurance it will create jobs or revive the economy."

Democrats in the Senate secured support for the bill from three Republican senators, Susan Collins and Olympia Snowe from Maine and Arlen Specter from Pennsylvania.

The House and Senate measures are largely similar, but there are differences over how to expand the federal medical programme, Medicaid, and on spending priorities.

While the House bill would give more money to schools, local governments and individual states, the Senate bill devotes more resources to tax cuts.

White House spokesman Robert Gibbs said Mr Obama would address a joint session of the House and the Senate on 24 February to outline his agenda.

Meanwhile, under Treasury Secretary Timothy Geithner's bank bail-out plan, the size of a key Federal Reserve lending program will be expanded to $1 trillion from $200bn.

In addition, a public-private investment fund of $500bn will be created to absorb banks' toxic assets and could be expanded to $1 trillion.

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